Overview

International law firm McDermott Will & Schulte act for Tecnimont S.p.A. and MT Russia LLC (together, the “Respondents”), subsidiaries of MAIRE S.p.A. (“MAIRE”), in ongoing ICC arbitration proceedings seated in London (the “Arbitration”) against LLC EuroChem North-West-2 (“EuroChem LLC”) and EuroChem Group AG (“EuroChem AG” and, together with EuroChem LLC, “EuroChem”).

Despite having participated in the Arbitration for more than three years and, therefore, indisputably submitted to the exclusive jurisdiction of the ICC arbitral tribunal (the “Tribunal”), EuroChem LLC has recently changed its strategy by commencing various actions before the Russian courts concerning the same matters being determined in the Arbitration (the “Russian Actions”) and in clear breach of the parties’ agreement to arbitrate.

The Respondents obtained peremptory orders (i.e., a serious form of order that, if breached, can be enforced in the English Courts) from the Tribunal restraining the Russian Actions, which order was breached by EuroChem LLC. The Respondents then obtained an order (endorsed with a penal notice) under section 42 of the Arbitration Act 1996 (the “Arbitration Act”) from Mr. Justice Butcher sitting in the Commercial Court on 21 November 2025, which required EuroChem LLC to (a) comply with the Tribunal’s directions; (b) withdraw the Russian Actions; and (c) discharge certain interim relief already obtained as part of those proceedings in Russia (the “Butcher J Order”).  View the judgment in this first instance decision.

EuroChem LLC appealed the Butcher J Order on a single point of statutory construction, arguing that orders under sections 41 and 42 of the Arbitration Act could only be concerned with a party’s conduct of an arbitral reference.  In doing so, EuroChem LLC submitted that the Tribunal’s peremptory orders restraining the pursuit of the Russian Actions was not “necessary for the proper and expeditious conduct of the arbitral proceedings”, meaning that Butcher J should not have made his order under section 42.

The Respondents contended that this restrictive interpretation is at odds with the natural meaning of words used in section 41(5) of the Arbitration Act, which permit a tribunal to issue a peremptory order when a party fails to comply with “any order or directions of the tribunal” (emphasis added).  It therefore follows that both the Tribunal’s original peremptory orders, and the Butcher J Order, fell squarely within the ambit of section 42.

The Court of Appeal was not persuaded by any of EuroChem LLC’s arguments and, additionally, refused EuroChem LLC a stay pending any application for permission to appeal to the Supreme Court because it was obvious that Eurochem LLC would not abide by the Court’s order and would instead continue the Russian Actions.  A detailed judgment providing reasons for the Court making this order will follow in due course.

As at the time of writing, EuroChem LLC has failed to withdraw the Russian Actions and therefore remains in breach of the Butcher J Order.

Further Background

In 2020, the Respondents and EuroChem LLC entered into various agreements concerning the construction of a major fertiliser plant in Kingisepp, Russia, for EuroChem (the “Agreements”). As a result of Russia’s invasion of Ukraine and the imposition of increased financial and trade sanctions (including the designation of EuroChem’s owner, Mr. Andrey Igorevich Melnichenko), the Respondents suspended their services under the Agreements in May-July 2022. Subsequently, EuroChem LLC terminated the Agreements, alleging that the Respondents had failed to properly perform their services and denying that it was owned and controlled by Mr. Melnichenko.

As explained in this press release, McDermott also represented Tecnimont S.p.A. as a non-cause of action defendant, and Part 20 defendant, in parallel proceedings before the English courts concerning the attempted enforcement by EuroChem of certain performance bonds totalling €212 million issued by Société Générale and ING Bank (the “Banks”) to secure the obligations of the Respondents under the Agreements. The Banks refused to make payment to EuroChem under the bonds on the basis that, amongst other things, to do so would breach EU sanctions as EuroChem is owned and controlled by Mr. Melnichenko, who remains designated as an individual “responsible for actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine.” On 31 July 2025, Mr. Justice Bright in the English Commercial Court found in favour of the Banks and Tecnimont S.p.A. and dismissed EuroChem’s claims (the “Bright J Judgment”). Readers can access a copy of the judgment.

As a result of the adverse findings in the Bright J Judgment, which support the Respondents’ decision to suspend their services under the Agreements and, therefore, their position in the Arbitration, EuroChem LLC attempted to move the dispute to its home courts in Russia by commencing the Russian Actions. On 2 September 2025, EuroChem LLC issued an action before the Moscow Arbitrazh Court seeking the same relief as its counterclaims in the Arbitration (the “Moscow Action”). In the Moscow Action, EuroChem LLC also obtained an interim order against the Respondents freezing the Respondents’ movable and immovable property up to an amount of approximately EUR 100 million.  On 27 November 2025, notwithstanding the absence of any documentary or expert evidence, the Moscow Arbitrazh Court awarded EuroChem LLC approximately EUR 1.9 billion against the Respondents.  In addition, on 2 October 2025, EuroChem LLC issued two separate anti-arbitration applications before the St. Petersburg Arbitrazh Court against the Respondents, seeking an order restraining the Respondents from continuing with the Arbitration (the “St. Petersburg Actions”).

Both sets of Russian Actions rely on the so-called ‘Lugovoy Law’ (Article 248 of the Russian Arbitrazh Code), which effectively enables Russian Courts to ignore and/or frustrate the impact (whether as a matter of fact or law) of EU sanctions.  In effect, their purpose is to try and allow EuroChem LLC to resile from its agreement to arbitrate and shift the proceedings to a ‘friendlier’ forum.

In response to the Russian Actions, the Respondents obtained several orders from the Tribunal, unanimously deprecating the actions of EuroChem LLC and requiring it to withdraw and/or discharge the proceedings in Russia. Having repeatedly breached the Tribunal’s orders, the Tribunal issued peremptory orders under section 41(5) of the Arbitration Act (the “Peremptory Orders”).

EuroChem LLC failed to comply with the Tribunal’s Peremptory Orders and so the Respondents issued proceedings before the English Commercial Court on 17 October 2025 seeking an order under section 42 of the Arbitration Act to restrain EuroChem LLC from continuing the Russian Proceedings.  These proceedings were dealt with on an expedited timetable. On 21 November 2025, Mr. Justice Butcher made the Butcher J Order, granting an injunction (backed by a penal notice) requiring EuroChem LLC to comply with the Peremptory Orders and withdraw each of the Moscow and the St. Petersburg Actions.

EuroChem LLC failed to persuade the Court of Appeal that Mr. Justice Butcher was wrong to grant an anti-suit injunction under section 42 of the Arbitration Act.  The Court of Appeal did not accept EuroChem LLC’s submission that the High Court’s power to grant such relief is only available under section 37 of the Senior Courts Act 1981.  The Respondents, which had mounted a case based on section 37 in any event, submitted that there was no supporting case law or commentary supporting such a restrictive treatment of the Arbitration Act.  They argued that, upon a plain reading of the relevant provisions in the Arbitration Act, it was clear that the Tribunal was empowered to make the Peremptory Orders, and that Butcher J was entitled to make the Butcher J Order under section 42 of the Arbitration Act.

The Respondents also drew the Court of Appeal’s attention to recent factual developments.  Just eight days after the Butcher J Order, the Moscow Arbitrazh Court made an award to EuroChem LLC EUR 1.9 billion in the Moscow Action without the benefit of any documentary or expert evidence.  Then, approximately one week before the Court of Appeal hearing, EuroChem LLC obtained the anti-arbitration injunctions sought against the Respondents in the St. Peterburg Actions, which wrongfully order the Respondents to discontinue the Arbitration.

As the Respondents submitted in the Court of Appeal, the Russian Actions are interfering significantly with the proper conduct of the Arbitration.  Indeed, evidence filed by EuroChem LLC for the first instance hearing openly accepted that, following the Bright J Judgment, it had reassessed the prospects and feasibility of continuing the Arbitration, notwithstanding the Tribunal’s undisputed jurisdiction over the dispute.  Indeed, the Respondents noted that EuroChem LLC had in 2024 withdrawn at the Tribunal’s orders proceedings commenced in Russia in breach of the parties’ agreement to arbitrate.

The Respondents consider EuroChem LLC’s actions in continuing the Russian Actions to be in clear breach of the Tribunal’s Peremptory Orders and the Butcher J Order (as upheld by the Court of Appeal).

The MAIRE entities in the Arbitration and parallel English court litigation are represented by the disputes team of McDermott Will & Schulte, led by partners Milo Molfa, Alfonso Annibale De Marco, Jack Thorne and David Kiefer, supported by associates William Merry, James McGlaughlin, Jonathan Robb and William Evans in London, Mariafiore Miniussi in Milan, Maxime Delabarre in Paris, and Maria Cristina Rosales del Prado and Ignacio Zabala Alonso in Washington DC. Alan Maclean KC and Tom Leary, both of Blackstone Chambers in London, acted as counsel for Tecnimont in the English Court litigation.

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